Susana
Lastarria-Cornhiel, Grenville Barnes (1995):
Assessment of the Praedial Property Registration System in Peru
F. Non-Governmental Organizations
The ILD has been the major NGO involved in the formalization
of property in Peru. Through its campaigns to publicize and educate property owners on the
benefits of titling and registration of property, the ILD has raised the general public's
consciousness with regard to this issue. In addition, the ILD has designed a registration
system that significantly streamlines and simplifies the registration process for the
majority of property owners once they have a title to the property. ILD titling and
registration campaigns in urban and rural areas in the Region of Lima have increased the
number of property owners with registered titles.
NGOs (e.g., CEPES, Solidaridad, and CIPCA) are also active in
rural areas, assisting small farmers in the process of acquiring legal title deeds and in
applying for production credit, which sometimes involves the use of registered property
titles. NGOs play a major role as facilitators and overseers in the granting and
supervision of these loans. Box 1 describes one NGO that has been working in the rural
sector for decades and that is playing this role of intermediary/facilitator between small
producers and credit institutions.
Box 1: Credit for Small Farmers in Huaral
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CEPES (an NGO) is working in a credit program for small
farmers in Huaral. Approximately 80% of these small farmers are parceleros [FN 9]; others are ex-yanaconas [FN 10] who bought their land from hacendados under the 1964
Agrarian Reform Law. CEPES works as an intermediary between the solidarity groups and the
bank, facilitating and processing the loans. In 1990, when the Banco Agrario was
dismantled, a group of parceleros in Huaral asked CEPES to help them obtain credit.
CEPES went to a number of commercial banks asking them to extend credit to these farmers.
In 1991, the Banco de Comercio extended credit to a small number of solidarity groups at a
24% interest rate. The next year, CEPES established an agreement with the Banco Wiese and
36 farmers organized into four groups received credit. During the next two agricultural
cycles, the number of farmers receiving credit has increased. This year, 300 farmers
organized into 38 groups have received credit from Banco Wiese at 17% interest.
The maximum that Banco Wiese will lend to a farmer is
US$5,000 per crop. Banco Wiese prefers that the land be titled and registered, though it
is not mortgaged; the group guarantees the loan of each person. The credit period depends
on the crop: 6 months for corn, 9 months for cotton, 11 months for fruit trees. The
farmers pay a 3% fee to CEPES to work as an intermediary.
Some of the more successful farmers are now requesting
capitalization loans from Banco Wiese on an individual basis. In this case the bank
requires collateral based on registered property.
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